Assessing That Urban Outfitters Turnaround
Urban Outfitters Inc. (NASDAQ: URBN) is one retailer where the stall might be regaining some momentum. That is at least what the after-hours reaction has shown after the earnings report this evening contains some upside on the bottom-line and a…
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The specialty apparel retail outlet owner reported earnings of $0.23 per share versus the $0.20 per share estimate from Thomson Reuters. Revenues rose by more than 8.6% on a year over basis to $568.9 million. But Thomson Reuters was calling for revenues of more than $579 million.
It was the Urban Outfitters brand itself that led the sales as same-store sales there gained 6% and the direct-to-consumer sales rose 15% versus only 2% growth on the wholesale level. Despite the market treating this as a turnaround, the gross profit rate was down 131 basis points and the inventories rose by 13%. Selling, general and administrative expenses (SG&A) rose by 62 basis points.
Shares closed up 2.1% at $26.16 with a strong tape on the stock market today, but the after-hours reaction has shares up about 7% at $28.09 against a 52-week range of $21.47 to $33.90.
Today’s earnings report does not look or feel like a solid turnaround is coming on after the growth stalled significantly, but the market is treating it as “good enough” so far.
JON C. OGG
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
